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The S&P500 Keeps Setting New Highs. For How Long?

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Our Chief Equity Strategist and Economist, John Blank, says “The S&P500 may not reflect the U.S. economy. But the broader stock market does”. John is here to expand on that for us.

1. What does that mean?

2. There’s something going on that you refer to as a historically high S&P500 index concentration. Recently, the S&P 500 broke above its late-February high and notched fresh highs. The same for the Nasdaq Composite. Most of those gains were driven by strong gains in Big Tech stocks. Is that the concentration you’re referring to?

3. But this isn’t showing up in the wider breadth of the stock market, as more stocks were down that up overall. Is that worrisome to you?

4. So what should investors take away from this?

5. The market seems to be reacting positively to news that the number of new coronavirus cases continues to decline in the U.S. Since spiking and other seemingly positive developments on that front. If positive news continues to emerge, will the U.S. be viewed as one of the safest places in the World? And if so, will more capital also start flowing into the U.S. causing stocks to rise further?

6. So, is the tech rally and Covid news what’s driving this market now?

7. Going on as we speak, is the Kansas City Fed’s Annual Summer Jackson Hole central banker discussions. This year it’s a virtual event for obvious reasons. The symposium theme is: “Navigating the Decade Ahead: Implications for Monetary Policy.”

8. Fed Chair Powell’s speech titled “Monetary Policy Framework Review” will probably be the most watched. Are you looking for the same things to come from it as Wall Street is? (Note: Papers and other materials will be posted on the Kansas City Fed’s website, www.kansascityfed.org, as they are presented during the event.

9. Why do they hold this during the “Dog Days of Summer” anyway?

10. You’re looking at three major American brand stocks…Deere (DE - Free Report) , O’Reilly Automotive (ORLY - Free Report) and Whirlpool Corp. (WHR - Free Report) . Why these now?

That’s the latest from our Chief Equity Strategist & Economist, John Blank. With John, I’m Terry Ruffolo.


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